26.7- United States Tax Treaty with Belarus

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Certain treaty claims suspended as of December 17, 2024

Withholding agents may not accept treaty claims for tax withholding on interest payments on credits, loans and other forms of indebtedness connected with the financing of trade made to residents of Belarus on or after December 17, 2024.

Key Facts

• The U.S. treaty that applies to Belarus is the Convention Between the United States of America and the Union of Soviet Socialist Republics on Matters of Taxation (signed June 20, 1973), which has been carried over to Belarus as a successor state.
  
  

• On December 17, 2024, the U.S. gave formal notice to Belarus of the partial suspension of paragraph 1, subparagraph (g) of Article III of this Convention.
  
  

• The suspension is effective from December 17, 2024 and is scheduled to continue until December 31, 2026, unless changed by mutual agreement.
  
  

• According to the IRS, “withholding agents may not accept treaty claims for tax withholding on interest payments on credits, loans and other forms of indebtedness connected with the financing of trade made to residents of Belarus on or after December 17, 2024.”
  
  

What the Treaty (Pre-Suspension) Provided

While full details of the treaty are complex, here are general features typical of U.S. income tax treaties (and by extension the 1973 U.S.–USSR/Belarus convention):

• It allocates taxing rights between the U.S. and Belarus (or the USSR/its successor states) for income like business profits, dividends, interest, royalties, etc.
  
  

• It allows for relief from double taxation — for example, the resident country would typically give credit for taxes paid in the other country.
  
  

• It includes administrative‐cooperation provisions: exchange of information, etc.
  
  

• It contains a “saving clause” (as most U.S. treaties do) which allows the U.S. to tax its own citizens/residents as if the treaty did not exist in certain circumstances.
  
  

The Current Impact: Partial Suspension

Because of the partial suspension as of December 17, 2024:

• Treaty benefits relating to interest payments on credits, loans and indebtedness connected with trade to Belarusian residents are no longer available. Withholding agents should not apply treaty‐reduced rates for those payments.
  
  

• Other portions of the treaty may remain applicable (e.g., other types of income, definitions, etc.), but the suspension highlights that benefits are limited for certain income types.
  
  

Practical Implications for Taxpayers

• If you are a U.S. resident or citizen receiving income from Belarus (or a Belarus resident receiving U.S.-source income) you must check whether the treaty benefits still apply for your particular type of income.
  
  

• For types of income covered by the suspension (e.g., certain interest/loan payments to Belarus residents after 17 Dec 2024), you cannot rely on reduced treaty withholding rates.
  
  

• Other treaty provisions (e.g., for dividends, royalties, business profits) may still apply—but you’ll need to verify them based on the treaty text and any current updates.
  
  

• Because the treaty in question is older (1973 U.S.–USSR) and Belarus is a successor state, and because of the suspension, the tax certainty that modern treaties provide may be less robust in this situation.